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Ratification of Transactions

Question: : My husband and I refinanced our house. My husband has used the check in stock market. The check was both in our name. I have not seen the check. Can he do that?

Answer: If your name was on the check and your husband did not sign your name, a financial institution should not have accepted it and its acceptance was wrongful.

If your husband did sign your name, the question is whether he was authorized by you to do so. That is a question of fact. Whether you saw the check is not determinative. For example, if you knew the approximate amount of proceeds and agreed with your husband that it would be invested in the general manner it was invested, he may have been authorized to sign for you such documents as were necessary to carry out the investment, particularly if the investment account is in both of your names.

If you feel that you did not authorize the deposit of the check/ investment, you must act promptly to disaffirm the transactions by communicating in writing with the financial institution involved. Otherwise you may be considered to have ratified the transaction. Many financial institutions require written notice within 30 or 60 days of a transaction appearing on a periodic statement.

You cannot, for example, see how the investment pans out and if it loses money, claim that the investment was not authorized.

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